Health Net fined for late payments

Health Net of California paid a $100,000 fine yesterday for failing to reimburse doctors, hospitals and emergency rooms on time.

The insurer, which has more than 2 million members in its health maintenance organization and is the state's fourth-largest HMO, also cut a check for $54,000 to cover interest on the late payments.

The state Department of Managed Health Care, which monitors HMOs, started taking a closer look at the carriers after it fined PacifiCare of California a record $250,000 in March for late payments.

"It's an ongoing campaign on our part to vigorously enforce the prompt payment laws," said Daniel Zingale, head of the department. He said doctors and hospitals must be paid within 45 days, but some of Health Net's bills went unpaid for up to a year.

"We regret the action was necessary and we accept responsibility for the late payment of claims," said Lisa Kalustian, a spokeswoman for Health Net, based in Woodland Hills (Los Angeles County).

Kalustian said the insurer has corrected the problems which led to the late payments, which occurred between 1996 and 2000, by enhancing its computer tracking system and installing a system that will automatically calculate and pay interest in the event of a late payment. "We are confident claims are being paid and will be paid in a timely matter," she said.

Zingale said the nonpayment of bills puts a tremendous strain on already stressed hospital emergency rooms and medical groups in the state. "Whatever the reason, there's no excuse. It's posing a threat to patient care," he said.

The state department yesterday also fined a smaller insurer, Heritage Provider Network, $50,000. The Reseda (Los Angeles County) company, which has about 150,000 HMO members in the Bakersfield, Lancaster and Palm Springs area, owes about $200,000 in interest on its late payments.

Zingale said he hopes the fines serve as a deterrent. "We'll see more of these until the HMOs start paying their bills on time," he said.